Dariba Insights
VAT & tax guidance for Saudi businesses
ZATCA compliance, e-invoicing, audit readiness, and VAT recovery — written by the team that builds Dariba's review engine.
Zero-rating of qualifying medicines and medical goods under Article 35
Article 35 of the Implementing Regulations zero-rates supplies of Qualifying Medicines and Qualifying Medical Goods, with qualification determined by the classifications of the Ministry of Health or another competent authority.
Zero-rating of investment gold, silver and platinum under Article 36
Article 36 of the Implementing Regulations zero-rates the first supply of a Qualifying Metal by its producer or refiner and certain rights over investment metal, defined by a purity of at least 99 percent and tradeability on the global bullion market.
Qualified military goods supplied to the armed forces and internal security forces under Article 36 bis
Article 36 bis of the Implementing Regulations zero-rates supplies of qualified military goods to the armed forces and government internal security forces made through a registered and licensed taxable person, as amended by ZATCA Board Resolution No. (01-06-24).
Zero-rated supplies to diplomatic missions by qualified suppliers under Article 36 bis (2)
Article 36 bis (2) of the Implementing Regulations zero-rates supplies to diplomatic missions made by qualified suppliers, and must be read with Article 70(2), as amended in 2025, which lists diplomatic missions among the categories eligible for tax refunds.
Who counts as a Related Person for VAT under Article 37
Article 37 of the Implementing Regulations supplements the Agreement's control-based definition of Related Persons with specific cases covering family members, employers and partners, individuals and companies, commonly controlled legal persons, and trusts.
Fair Market Value in place of the agreed price under amended Article 38
Amended Article 38 of the Implementing Regulations replaces the agreed value with Fair Market Value where a supply between related persons or their affiliates is undervalued and the customer cannot fully deduct or recover the tax.
The value of a nominal supply under amended Article 39
Amended Article 39 of the Implementing Regulations values nominal supplies at purchase value or cost, falling back to fair market value under Article 38, and provides that government payments that are consideration for a supply are not a subsidy.
A later change to the value of a supply, and the matching change to input tax, under amended Article 40
Article 40 of the Implementing Regulations, as amended in 2025, sets out when the value of a supply is adjusted after the event, how the supplier corrects output tax, how the customer corrects input tax, and when unpaid purchases require an input tax reversal.
Goods treated as imported into the Kingdom from another Member State under Article 41
Article 41 of the Implementing Regulations treats goods worth more than SAR 10,000 brought into the Kingdom from another Member State by a legal person or an unregistered resident individual as an import, unless payment of VAT in the Member State of purchase is proved.
Imports that are exempt from VAT under Article 42
Article 42 of the Implementing Regulations exempts travellers' personal items and gifts and specified equipment for people with special needs, and limits customs-duty-linked exemptions for persons who pay import tax through their returns.
Which place-of-supply rule prevails: the priority of the Special Cases under Article 22
Article 22 of the Implementing Regulations gives the Special Cases in Articles 17 to 21 of the Common VAT Agreement precedence over the general principles in Articles 15 and 16.
Real Estate Related Services and their place of supply under Article 23
Article 23 of the Implementing Regulations defines Real Estate and Real Estate related services, which the Common VAT Agreement treats as supplied where the real estate is located.
Telecommunications and electronically supplied services: place of actual use under Article 24
Article 24 of the Implementing Regulations defines telecommunications and electronic services and explains how the place of actual use or enjoyment is determined under Article 20 of the Common VAT Agreement.
Place of supply of other services under Article 25: physical location, transport-related services and split performance
Article 25 of the Implementing Regulations explains the place-of-performance rule in Article 21 of the Common VAT Agreement, lists services relating to transportation, and requires apportionment where performance is partly outside the Kingdom.
Supplies of goods situated in the Kingdom under Article 26
Article 26 of the Implementing Regulations confirms that a supply of goods situated in the Kingdom, without their transport outside the Kingdom, is made in the Kingdom, unless the Agreement, the Law or the Regulations provide otherwise.
Goods sold with transportation, and the evidence required for an Internal Supply (Articles 27 and 28)
Articles 27 and 28 of the Implementing Regulations define a supply of goods with transportation, identify which of several chain supplies carries the transport, and set the evidence required where goods are sent to another Member State.
Which financial services are exempt under Article 29
Article 29 of the Implementing Regulations lists the financial services that are exempt from VAT, treats equivalent Islamic finance products in the same way, and gives a non-exhaustive list of exempt margin-based supplies.
Real estate supplies that are exempt, and those that are not, under Article 30
Article 30 of the Implementing Regulations exempts transfers of ownership of real estate and the lease or license of residential real estate, and excludes hotels and other temporary accommodation from residential real estate.
Zero-rating an export of goods from the Kingdom: the evidence and ninety-day rule in Article 32
Article 32 of the Implementing Regulations conditions the zero rate on exports of goods outside Council Territory on export, commercial and transport evidence obtained within ninety days of the supply.
Vouchers under Article 19: when the issue of a voucher is a supply, and when tax falls on the redeemed supply
Article 19 of the Implementing Regulations treats the issue or supply of a voucher as not a supply, except that a face value voucher is a supply of services to the extent the consideration exceeds its face value.
Who may be in a VAT tax group under amended Article 10 of the Implementing Regulations
Amended Article 10 sets cumulative conditions for tax group membership in the Kingdom, including an ownership or control test and exclusions for special zone licensees and refund-eligible persons.
Applying to form a VAT tax group and the role of the representative member
Amended Article 11 of the Implementing Regulations governs who files a tax group application, what it must contain, and how the representative member answers to the Authority for the group.
Adding or removing a tax group member, or disbanding the group
Article 12 of the Implementing Regulations, as amended, governs notification of changes, applications to add or remove members or disband a group, and the Authority’s anti-avoidance powers.
VAT deregistration: when it is required and what must be notified
Article 13 of the Implementing Regulations, as amended, sets out when a Taxable Person must or may deregister, the thirty-day application period, and the new obligations on assignment of an activity and record retention.
What is a taxable supply in the Kingdom under amended Article 14
Amended Article 14 of the Implementing Regulations restates the charge to VAT in the Kingdom and adds a non-exhaustive list of transactions treated as supplies of services.
Nominal (deemed) supplies under amended Article 15 and how their value is measured
Article 15 of the Implementing Regulations, as amended, treats certain transactions without consideration as supplies, sets fair market value limits for gifts, samples and staff benefits, and adjusts value where input tax was only partly deducted.
Transferring your own goods from the Kingdom to another GCC Member State
Article 16 of the Implementing Regulations, read with Article 6 of the GCC Agreement, sets out when moving your own business goods to another Member State is not a supply, and the sixty-day evidence requirement.
Transfer of an economic activity outside the scope of VAT under amended Article 17
Amended Article 17 of the Implementing Regulations sets four conditions, including a new notification requirement, for a transfer of a business activity to fall outside the scope of Tax.
Supplies by a legal person to itself under Article 18 of the Implementing Regulations
Article 18 places supplies within a single legal person, and between tax group members, outside the scope of VAT, and deems certain cross-border internal services to be taxable supplies by a nonresident supplier.
Date of supply and tax due date in the specific cases under Article 20
Article 20 of the Implementing Regulations sets the date of supply and tax due date for continuous supplies, utilities through a network, government contracts and nominal supplies on cessation.
Who is a Taxable Person required or eligible to register for VAT
Article 2 of the Implementing Regulations defines a Taxable Person in the Kingdom by reference to independent Economic Activity and registration status.
Mandatory VAT registration when expected supplies exceed the threshold
Article 4 of the Implementing Regulations requires a resident person to register when annual supplies expected in the next twelve months exceed SAR 375,000.
Non-resident mandatory VAT registration from the first taxable supply
Article 5 of the Implementing Regulations requires a non-resident obligated to pay Tax to apply within thirty days of the first Supply on which Tax is due.
Authority registration without application and agreed effective dates
Article 6(1) to (3) of the Implementing Regulations allow the Authority to register without an application and to agree earlier or later effective dates.
Capital Assets excluded from the annual supplies figure for VAT registration
Article 6(5) of the Implementing Regulations and Article 52(2)(a) of the Agreement exclude Capital Assets Supply from annual supplies used for registration.
Voluntary VAT registration based on supplies or expenses
Article 7 of the Implementing Regulations allows a resident person to apply for voluntary registration where supplies or expenses meet the Voluntary Registration Threshold.
Exclusively zero-rated supplies and exclusion from mandatory VAT registration
Article 9(1) of the Implementing Regulations excludes a person whose annual supplies exceeding the mandatory threshold are exclusively zero-rated from the requirement to register.
Aggregation of Related Persons’ annual supplies for VAT registration
Article 9(2) of the Implementing Regulations allows the Authority to require Related Persons carrying on similar or related activities to aggregate annual Supplies.
Government body acting as a public authority is not an Economic Activity
Article 9(5) of the Implementing Regulations excludes certain government-body activities from Economic Activity where legal authority, non-commercial standards and exclusivity are met.
Employment wages and secondment: what falls outside Economic Activity
Article 9(6) and (7) of the Implementing Regulations keep qualifying employment and secondment wages outside Economic Activity while treating the taxable commission separately.
Mandatory VAT registration when twelve months of supplies exceed SAR 375,000
A twelve-month test determines when a resident person must apply for VAT registration after exceeding the SAR 375,000 threshold.
International transport of goods, and the absence of a customer-residence test in Article 34
Article 34 zero-rates qualifying international transport without stating a customer-residence test.
When storage, packing and loading are zero-rated as services relating to transport
Storage, packing and loading may be zero-rated only under the two limbs of Article 34(5).
Zero-rating the supply, maintenance and repair of a qualifying means of transport
The VAT zero-rate for qualifying means of transport depends on certificates and a 75% international-transport test.
Customs duty suspension, special zones, and the limits of Article 32 bis
Article 32 bis covers customs duty suspension and specified special-zone transactions, not a general zero-rate for services.
Zero-rating services supplied to a customer with no Place of Residence in a Member State
Article 33 zero-rates services to customers without a Place of Residence in a GCC Member State, subject to stated exceptions.
Exempt financial services, explicit fees, and the life-insurance exception
Article 29 exempts listed financial services, with a life-insurance exception for explicit fees, commissions and discounts.
When an online marketplace is the deemed supplier for an unregistered resident supplier
Article 47(3) deems an online marketplace to resupply taxable goods or services from an unregistered resident supplier.
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